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How embracing AI can drastically reduce the number of disputes and claims in the construction industry

Embracing the benefits of artificial intelligence (AI) could be a gateway to new, non-adversarial techniques by which to conduct business. It could potentially eliminate future claims and disputes, particularly those based upon invalid records.

Complex contractual disputes on numerous infrastructure and construction projects across the supply chain industry will inevitably impact the final out-turn costs on projects, whether they are upstream or downstream claims. The industry will continue its trajectory towards a claims culture, peppered with protracted disputes that may delay projects that are essential to support our growing population. This is something that we all have a vested interest in.

Disputes and claims in the industry generally include arguments around contradictory evidence that may complicate the real issues, jeopardising just entitlement. Imagine not having to spend time debating the facts of a case, but having access to shared electronic data that can’t be manipulated? It’s simple really – if facts are facts, then what is there to be disputed?

Embracing the benefits of artificial intelligence (AI) could be a gateway to new, non-adversarial techniques by which to conduct business. It could potentially eliminate future claims and disputes, particularly those based upon invalid records.

Whether or not the industry wants to adopt emerging technology is another matter. It will require “buy-in”, both financially and procedurally from all project and corporate stakeholders. The first roadblock is that savings (a keyword in most enterprises, whether privately or publicly funded) are unlikely to be found at a project level during the standardisation and implementation of new technologies. Unfortunately, as an industry, we tend to be short-sighted. Greater certainty around construction costs will undoubtedly reduce the significant overheads diverted to funding claims in a project lifecycle down the track.

Steve Bolt

A second issue is related to a commonly used claim strategy: non-disclosure. It is frequently perceived by parties that it is in their interest to withhold certain project information. In what is a traditionally adversarial culture, significant relationship-based benefits can be gained by showing your cards. Fear is based on uncertainty, and equipping stakeholders with secure, undisputed data, based upon drone surveillance, advanced BIM technologies and electronic records that map progress, has to be encouraged and can only protect the bottom line.

With the age of integrated communication, transparency is inevitable, and it is anticipated that the traditional but artificial barriers to the disclosure of information on projects that exist today, may be obstacles that are unwanted by all in the future.

How will AI reduce the number of disputes and claims in the construction industry?

  • The advancements in due diligence will aid in uncovering background information. Contract review, legal research and electronic discovery will offer the best available, most relevant and robust evidence. It is reasonable to expect that disputes could be resolved more effectively and efficiently if the parties are relying on the same attesting evidence.
  • Predictive technology will be able to generate results that forecast potential disputes before they arise.

Using analysis based on risk and probability-based outcomes, when reliable, will potentially be the first stage in settling or even avoiding disputes before a formal dispute proceeds.

  • AI tools will be able to provide a detailed analysis of large databases of information.

Insights will be drawn from content more efficiently and accurately.

  • Over-expenditure made easier with an electronic billing/cost reconciliation system.

The collation of costs will be computed automatically to generate management accounts and will assist those analysing the causes of over-expenditure on distressed projects.

One thing is for sure, AI will feature more and more in our future business lives and will continue to be a major disruptor.

Steve Bolt is national manager of contracts, claims and dispute services at WT Partnership Australia

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